Prices are softening in the UK pork market, despite the Dutch slaughterhouse shutdown and the threat of disruption to EU exports caused by the US and Canadian blockade on European product. Clearest indicators of the swing from shortage to surplus are high profile promotions of British pork by Tesco and Safeway. Others, notably Somerfield, had already been discounting some cuts and prices were skidding in the wholesale trade, so the Tesco and Somerfield announcements on March 16 are interpreted by the market as demonstrating a trend rather than volatility caused by the fmd crisis. Statements from the two companies highlighted the loss of export markets for British pork due to the epidemic, creating a need for extra domestic demand to soak up surplus supplies. Safeway said pork deliveries to its stores would be 100% British from Monday, March 19, and prices were being slashed by £1/kg to £2.59/kg on boneless shoulder and by £2/kg to £5.99/kg on fillet. Tesco pointed out the uneven effect of the export ban, which was hitting demand for shoulder and belly pork hardest. The company promised to buy more of these cuts and would mount a special in-store promotion to boost sales. Weak prices in the pork sector have resulted from unexpectedly strong recovery in home production, as well as the suspension of exports. And when the emergency licensing scheme allowed some slaughtering to resume, the pig kill rose quickly to about 80% of normal throughput ­ a much faster rebound than in the cattle and sheep sectors. The outlook for overall EU pigmeat supply, however, remains unclear following bans imposed by major buyers on the world market. By Monday it was apparent the Danes were getting product into Japan, calming fears among that a complete prohibition by the Japanese would cause a catastrophic price collapse (The Grocer, March 17, p27). Nevertheless, US pork prices have soared on the back of American traders' hopes of a sales bonanza. Higher prices for American pigs coinciding with a drop in feed prices hint at the potential for further expansion of output in the US and Canada, perhaps implying more weakness in the European market after the fmd crisis fades. {{M/E MEAT }}

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